Book Beat Babes

Friday, February 24, 2017

When most of us strike out to be a successful writer we think
of all things writing such as:

-Traditional vs. Indie publishing

-Do we need an agent

-How to engage readers

-Finishing the Damn Book

-…and more

What we don’t typically thing about are the tax consequences
of that journey to becoming a successful writer.

One of the first things to determine, especially in the beginning,
is whether you are conducting your writing as a hobbyist or a business. If you limit yourself to just writing and don’t
incur any expenses and/or earn any money in your writing journey then the
question is somewhat mute, although, if you are incurring expenses do keep a
written record of them so that you can consider them later, potentially as
startup costs.

To be considered a business, you have to have – and be able to
demonstrate – a serious intent to make a profit. This is detailed in the Form 1040 Schedule C
and related instructions found at the two links below:

If you don’t care whether or not you make any money with
your writing but just happen to, along the way, receive money for your efforts
then you fall into the category of being a hobbyist and the way you reflect
your income and expenses is explained in IRS Publication 529:

So, if you want to know if your writing journey is a
business or a hobby, use the link above to see if you pass or fail the test of
being a hobbyist, and definitely read the Schedule C and related instructions.